Neutral Escorts Kubota Ltd For Target Rs.1,875 - Motilal Oswal Financial Services
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Wholesales in line at 5.6k, up 19% YoY
* Escorts Kubota posted a 19% YoY growth in Tractor dispatches to 5.6k units in Dec’22 (est. 5.8k units).
* It reported a 22% YoY growth in domestic Tractor sales to ~5k units (est. 5.2k).
* However, it clocked a 3% YoY decline in Tractor exports to 594 units (est. 575 units).
* Sales of Construction Equipment grew 12% YoY to 423 units.
* We expect Tractor volumes to grow ~9% in FY23, implying a monthly run-rate of ~8.1k units, or a 10.5% residual growth. We are estimating a 5% growth in Construction Equipment for FY23, implying a monthly run-rate of 451 units, or a 5% residual growth.
* The stock trades at 35.4x/26.2x FY23E/FY24E EPS. We retain our Neutral rating.
Management commentary:
Tractors: Rural sentiments continue to remain favorable on account of good Kharif procurement, Rabi sowing and better water level in reservoirs.
Outlook for the Construction Equipment segment: We are witnessing improved demand across all three business segments, namely, Pick and Carry cranes, Earth Moving and Road Construction segments, as the infrastructure projects are now moving at a fast pace. We expect this demand to continue for the remaining period of this fiscal year.
To Read Complete Report & Disclaimer Click Here
For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412
Above views are of the author and not of the website kindly read disclaimer
